SAO PAULO: Brazil said Friday it planned to boost sugarcane production over the next four years for use as ethanol fuel in light vehicles.
The federal government said a strategic plan to increase sugarcane output during the 2012-2015 period was being developed to firm up ethanol's role as the leading fuel for Brazil's fleet of light vehicles.
Since 1976 the government made it mandatory to blend anhydrous ethanol, containing a maximum one percent of water, with gasoline, fluctuating between a 10 percent and 22 percent ratio, for use in light vehicles.
The new plan would raise the proportion of anhydrous ethanol to gasoline to 25 percent and the share of light vehicles using hydrated ethanol -- with seven percent water -- to between 50 and 55 percent.
Among the measures being envisaged to meet growing national demand and the potential for ethanol export is the renovation of 6.4 million hectares (15.8 million acres) until 2015 at a cost estimated at $29 billion.
Another is an investment of around $8.5 billion to increase the number of processing factories. According to industry statistics, most of the sugarcane processing facilities are operating below capacity.
A third is to increase the areas under sugarcane cultivation to 3.8 million hectares at a cost of $23 billion.
Funding for the plan will come from the Brazilian Development Bank, a federal public company associated with the ministry of development, industry and foreign trade.
Ethanol, made mostly by using sugar, is widely used in Brazil as a cheaper alternative to gasoline for motor fuel.
Brazil is the second-biggest producer of ethanol in the world, after the United States, and the biggest exporter of the biofuel.
It sustains a large domestic market using ethanol through the sales of cars whose engines can take either gasoline, ethanol or a mix of the two.